Exhibit 99.1
| | |
| FOR RELEASE | | FOR MORE INFORMATION CONTACT |
| April 30, 2008 | | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Reports First Quarter Financial Results
HOUSTON, April 30, 2008 -Cabot Oil & Gas Corporation today announced results from its first quarter of 2008. “The quarter was marked by positive momentum in production and commodity prices, along with new highs for our stock price,” said Dan O. Dinges, Chairman, President and Chief Executive Officer.
For the quarter, the Company reported net income (after removal of stock compensation expense and gain on asset sale), of $57.0 million, or $0.58 per share, compared to $47.7 million, or $0.49 per share last year. The 2008 first quarter selected items related to stock-based compensation expense, while the 2007 first quarter selected items included both stock-based compensation expense and a gain on the sale of assets (see attached table for details). Including the impact of these items, the reported numbers for the quarter were $46.0 million, or $0.47 per share, for the first quarter of 2008 versus $48.5 million, or $0.50 per share in the 2007 first quarter. Discretionary cash flow and cash flow from operations first quarter comparisons were $138.4 million versus $106.7 million and $132.7 million versus $135.9 million for 2008 and 2007, respectively.
Higher produced equivalent volumes, together with stronger prices, increased revenues. The Company reported 22.2 Bcfe of production, which is the highest quarterly level Cabot has reported since its asset sale in 2006. “After a slow start to the year, we experienced increasing production levels throughout the quarter, exiting the quarter with in excess of 255 Mmcfe per day,” commented Dinges. “Part of the delay was retooling of the drilling program to focus more on specific objectives than had been identified in the original program. This is evidenced by the lower well activity in the first quarter versus one year ago.” Dinges added, “Even with this adjustment, our daily production volumes increased over ten percent between the start and the end of the first quarter.”
This higher production was complemented by a seven percent increase in total natural gas price realizations and a 62 percent increase in total oil price realizations between first quarter comparative periods. On the expenses side, the significant move in the share price increased stock compensation expense, while the level of activity and inflation in the industry over recent years increased the DD&A expense. At the same time, the higher commodity prices increased production taxes, and the higher debt levels resulted in higher interest costs.
“Several years ago, we set out to align our compensation plans with shareholder interests,” stated Dinges. “The first quarter move in the stock of 26 percent created much of the $17.6 million recorded expense; however, it also resulted in a one billion dollar increase in shareholder value. On the debt side, our book capitalization remains around the mid 20 percent level, affording Cabot extensive flexibility to pursue all of its projects.”
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s first quarter financial and operating results discussion with financial analysts on Thursday, May 1, 2008 at 9:30 a.m. EDT (8:30 a.m. CDT) atwww.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 42873469. A replay will be available through Saturday, May 3, 2008. The latest financial guidance, including the Company’s hedge positions, along with a replay of the web cast, which will be archived for one year, are available in the investor relations section of the Company’s website atwww.cabotog.com.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; the East and in Canada. For additional information, visit the Company’s Internet homepage atwww.cabotog.com.
The statements regarding future financial performance and results and the other statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, market factors, the market price (including regional basis differentials) of natural gas and oil, results of future drilling and marketing activity, future production and costs, and other factors detailed in the Company’s Securities and Exchange Commission filings.
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OPERATING DATA
| | | | | | | | |
| | | Quarter Ended
March 31, | |
| | | 2008 | | | 2007 | |
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | | | | | | | | |
Natural Gas | | | | | | | | |
East | | | 6.0 | | | | 5.8 | |
Gulf Coast | | | 7.4 | | | | 6.5 | |
West | | | 6.4 | | | | 6.4 | |
Canada | | | 1.2 | | | | 1.1 | |
| | | | | | | | |
Total | | | 21.0 | | | | 19.8 | |
| | | | | | | | |
Crude/Condensate/Ngl | | | | | | | | |
East | | | 6 | | | | 6 | |
Gulf Coast | | | 144 | | | | 148 | |
West | | | 36 | | | | 47 | |
Canada | | | 6 | | | | 6 | |
| | | | | | | | |
Total | | | 192 | | | | 207 | |
| | | | | | | | |
| | |
Equivalent Production (Bcfe) | | | 22.2 | | | | 21.0 | |
| | |
PRICES | | | | | | | | |
Average Produced Gas Sales Price ($/Mcf) | | | | | | | | |
East | | $ | 8.28 | | | $ | 8.08 | |
Gulf Coast | | $ | 8.30 | | | $ | 7.75 | |
West | | $ | 7.26 | | | $ | 6.51 | |
Canada | | $ | 7.38 | | | $ | 7.46 | |
Total(1) | | $ | 7.92 | | | $ | 7.42 | |
| | |
Average Crude/Condensate Price ($/Bbl) | | | | | | | | |
East | | $ | 90.04 | | | $ | 53.49 | |
Gulf Coast | | $ | 84.58 | | | $ | 53.07 | |
West | | $ | 95.66 | | | $ | 54.17 | |
Canada | | $ | 79.38 | | | $ | 54.44 | |
Total(1) | | $ | 86.55 | | | $ | 53.36 | |
| | |
WELLS DRILLED | | | | | | | | |
Gross | | | 85 | | | | 100 | |
Net | | | 65 | | | | 92 | |
Gross Success Rate | | | 98 | % | | | 99 | % |
(1) | These realized prices include the realized impact of derivative instrument settlements. |
| | | | | | | |
| | | Quarter Ended
March 31, |
| | | 2008 | | | 2007 |
Realized Impacts to Gas Pricing | | $ | 0.03 | | | $ | 0.89 |
Realized Impacts to Oil Pricing | | $ | (8.60 | ) | | $ | 0.89 |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| | | | | | |
| | | Quarter Ended
March 31, |
| | | 2008 | | 2007 |
Operating Revenues | | | | | | |
Natural Gas Production | | $ | 166,559 | | $ | 146,750 |
Brokered Natural Gas | | | 35,620 | | | 33,177 |
Crude Oil and Condensate | | | 16,487 | | | 10,942 |
Other | | | 985 | | | 704 |
| | | | | | |
| | | 219,651 | | | 191,573 |
Operating Expenses | | | | | | |
Brokered Natural Gas Cost | | | 30,290 | | | 28,699 |
Direct Operations - Field and Pipeline | | | 17,491 | | | 17,131 |
Exploration | | | 5,061 | | | 5,652 |
Depreciation, Depletion and Amortization | | | 46,267 | | | 37,381 |
General and Administrative (excluding Stock-Based Compensation) | | | 9,997 | | | 11,645 |
Stock-Based Compensation(1) | | | 17,576 | | | 6,635 |
Taxes Other Than Income | | | 16,897 | | | 13,165 |
| | | | | | |
| | | 143,579 | | | 120,308 |
| | |
Gain on Sale of Assets(2) | | | — | | | 7,920 |
| | | | | | |
Income from Operations | | | 76,072 | | | 79,185 |
Interest Expense and Other | | | 5,991 | | | 3,924 |
| | | | | | |
Income Before Income Taxes | | | 70,081 | | | 75,261 |
Income Tax Expense | | | 24,106 | | | 26,714 |
| | | | | | |
Net Income | | $ | 45,975 | | $ | 48,547 |
| | | | | | |
Net Earnings Per Share - Basic | | $ | 0.47 | | $ | 0.50 |
Weighted Average Common Shares Outstanding | | | 97,716 | | | 96,695 |
(1) | Includes the impact of the Company’s performance share awards and restricted stock amortization as well as expense related to stock options and stock appreciation rights. Also includes expense for the Supplemental Employee Incentive Plan which commenced in January 2008. |
(2) | Gain on Sale of Assets is primarily related to the sale in the third quarter of 2006 of offshore and certain south Louisiana properties. |
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
| | | | | | |
| | | March 31,
2008 | | December 31,
2007 |
Assets | | | | | | |
Current Assets | | $ | 272,004 | | $ | 221,413 |
Property, Equipment and Other Assets | | | 2,004,084 | | | 1,939,334 |
Deferred Income Taxes | | | 53,902 | | | 47,847 |
| | | | | | |
Total Assets | | $ | 2,329,990 | | $ | 2,208,594 |
| | | | | | |
Liabilities and Stockholders’ Equity | | | | | | |
Current Liabilities | | $ | 321,626 | | $ | 252,266 |
Long-Term Debt, excluding Current Maturities | | | 350,000 | | | 330,000 |
Deferred Income Taxes | | | 508,138 | | | 481,770 |
Other Liabilities | | | 85,980 | | | 74,301 |
Stockholders’ Equity | | | 1,064,246 | | | 1,070,257 |
| | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,329,990 | | $ | 2,208,594 |
| | | | | | |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
| | | | | | | | |
| | | Quarter Ended
March 31, | |
| | | 2008 | | | 2007 | |
Cash Flows From Operating Activities | | | | | | | | |
Net Income | | $ | 45,975 | | | $ | 48,547 | |
Income Charges Not Requiring Cash | | | 63,806 | | | | 44,551 | |
Gain on Sale of Assets | | | — | | | | (7,920 | ) |
Deferred Income Tax Expense | | | 23,560 | | | | 15,874 | |
Changes in Assets and Liabilities | | | (1,056 | ) | | | 33,289 | |
Stock-Based Compensation Tax Benefit | | | (4,642 | ) | | | (4,135 | ) |
Exploration Expense | | | 5,061 | | | | 5,652 | |
| | | | | | | | |
Net Cash Provided by Operations | | | 132,704 | | | | 135,858 | |
| | | | | | | | |
Cash Flows From Investing Activities | | | | | | | | |
Capital Expenditures | | | (128,101 | ) | | | (113,748 | ) |
Proceeds from Sale of Assets | | | — | | | | 5,784 | |
Exploration Expense | | | (5,061 | ) | | | (5,652 | ) |
| | | | | | | | |
Net Cash Used in Investing | | | (133,162 | ) | | | (113,616 | ) |
| | | | | | | | |
Cash Flows From Financing Activities | | | | | | | | |
Sale of Common Stock Proceeds | | | 2,240 | | | | 1,144 | |
Net Increase / (Decrease) in Debt | | | 20,000 | | | | (10,000 | ) |
Stock-Based Compensation Tax Benefit | | | 4,642 | | | | 4,135 | |
Dividends Paid | | | (2,930 | ) | | | (1,933 | ) |
| | | | | | | | |
Net Cash Provided by / (Used in) Financing | | | 23,952 | | | | (6,654 | ) |
| | | | | | | | |
Net Increase in Cash and Cash Equivalents | | $ | 23,494 | | | $ | 15,588 | |
| | | | | | | | |
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
| | | | | | | |
| | | Quarter Ended
March 31, | |
| | | 2008 | | 2007 | |
As Reported - Net Income | | $ | 45,975 | | $ | 48,547 | |
Reversal of Selected Items, Net of Tax: | | | | | | | |
Gain on Sale of Assets | | | — | | | (4,926 | ) |
Stock-Based Compensation Expense | | | 11,055 | | | 4,127 | |
| | | | | | | |
Net Income Excluding Selected Items | | $ | 57,030 | | $ | 47,748 | |
| | | | | | | |
As Reported - Net Earnings Per Share | | $ | 0.47 | | $ | 0.50 | |
Per Share Impact of Reversing Selected Items | | | 0.11 | | | (0.01 | ) |
| | | | | | | |
Net Earnings Per Share Including Reversal of Selected Items | | $ | 0.58 | | $ | 0.49 | |
| | | | | | | |
Weighted Average Common Shares Outstanding | | | 97,716 | | | 96,695 | |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
| | | | | | | | |
| | | Quarter Ended
March 31, | |
| | | 2008 | | | 2007 | |
Discretionary Cash Flow | | | | | | | | |
As Reported - Net Income | | $ | 45,975 | | | $ | 48,547 | |
Plus / (Less): | | | | | | | | |
Income Charges Not Requiring Cash | | | 63,806 | | | | 44,551 | |
Gain on Sale of Assets | | | — | | | | (7,920 | ) |
Deferred Income Tax Expense | | | 23,560 | | | | 15,874 | |
Exploration Expense | | | 5,061 | | | | 5,652 | |
| | | | | | | | |
Discretionary Cash Flow | | | 138,402 | | | | 106,704 | |
Changes in Assets and Liabilities | | | (1,056 | ) | | | 33,289 | |
Stock-Based Compensation Tax Benefit | | | (4,642 | ) | | | (4,135 | ) |
| | | | | | | | |
Net Cash Provided by Operations | | $ | 132,704 | | | $ | 135,858 | |
| | | | | | | | |
Net Debt Reconciliation
(In thousands)
| | | | | | | | |
| | | March 31,
2008 | | | December 31,
2007 | |
Current Portion of Long-Term Debt | | $ | 20,000 | | | $ | 20,000 | |
Long-Term Debt | | | 350,000 | | | | 330,000 | |
| | | | | | | | |
Total Debt | | $ | 370,000 | | | $ | 350,000 | |
Stockholders’ Equity | | | 1,064,246 | | | | 1,070,257 | |
| | | | | | | | |
Total Capitalization | | $ | 1,434,246 | | | $ | 1,420,257 | |
Total Debt | | $ | 370,000 | | | $ | 350,000 | |
Less: Cash and Cash Equivalents | | | (41,992 | ) | | | (18,498 | ) |
| | | | | | | | |
Net Debt | | $ | 328,008 | | | $ | 331,502 | |
Net Debt | | $ | 328,008 | | | $ | 331,502 | |
Stockholders’ Equity | | | 1,064,246 | | | | 1,070,257 | |
| | | | | | | | |
Total Adjusted Capitalization | | $ | 1,392,254 | | | $ | 1,401,759 | |
Total Debt to Total Capitalization Ratio | | | 25.8 | % | | | 24.6 | % |
Less: Impact of Cash and Cash Equivalents | | | 2.2 | % | | | 1.0 | % |
| | | | | | | | |
Net Debt to Adjusted Capitalization Ratio | | | 23.6 | % | | | 23.6 | % |
